Shopify Ecosystem

3 Ways To Use Transactional Emails To Maximize LTV

3-ways-to-use-transactional-emails-to-maximize-ltv

Transactional email have 3-4 times higher open rates than regular emails. In this post we share three ways to use them to drive additional revenue.

Transactional emails are usually sent when a customer has placed an order like shipping confirmation emails and order confirmation emails. But they could also include reminders for abandoned cart checkouts, lost password requests among many others.

At face value, they don’t seem to have an impact to maximizing customer lifetime value, but they can be pretty useful. In fact, a study by Experian found that transactional order emails average $0.75 per open compared to $0.13 for bulk mailings on orders.

But how can simple notifications increase customer lifetime value? How can they drive repeat purchases?

In this article, we’ll discuss some insider tips you need to know in order to upgrade your transactional emails and boost sales:

One way you can maximize the power of product recommendations is to add them in your transactional emails.

How effective are product recommendations in maximizing your profits?

Intelliverse found that 45% of consumers are more likely to shop on a site that offers personalized recommendations and  56% of online customers are more likely to return to a site that offers product recommendations.

For example, Costco’s order confirmation email has product recommendations that are based on top categories. It’s nothing special, but it can drive repeat purchases.

Another tip is to send personalized product recommendations based on a consumer’s purchase history or behavior. This way, you’ll be upselling products that customers will likely be interested in.

For example, Amazon’s order confirmation email includes recommendations based on a customer’s past purchase.

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Adding personalized product recommendations in your transactional emails make a lot of sense because they have high open rates. In fact, transactional emails have open rates that are 3x to 4x higher than the regular marketing email. That’s because customers often check transactional emails to confirm the success of their transactions.

Another type of transactional email you can use is the feedback email which is sent a few days or weeks after the customer has received or used the product.

Why are product reviews important to your retail store? Reviews determine whether people will buy your product. Additionally, while writing reviews don’t directly lead to repeat purchases, they’re pretty effective at getting other customers to buy a product.

Numerous studies consistently found that star ratings and reviews have a big impact on sales. In fact, BrightLocal found that 44% prefer products with reviews within the past month and   Reevo found that reviews can result in an 18% increase in sales.

And contrary to popular belief, negative reviews might do you some good. Capterra found that 52% of buyers trust a product more when they see a fewer negative reviews. After all, there’s no perfect product.

You can ask for reviews by sending a simple feedback email like J. Crew:

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Writing a review seems easy, but it does take some time and effort.

That said, you should thank customers because any kind of feedback is useful for your Shopify store. Here’s an example of how J. Crew thanks their customers:

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You don’t always have to ask for long reviews, sometimes a star rating might do.

For example, JCPenney asks for a star rating a few days after the customer has received the product. They also give customers the option to write a long review through clicking the “Write a Review” button.

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They also incentive customers by giving them a chance to win $1000.

You can also provide other incentives like discounts and coupons in exchange for the review. After all, people are more motivated when they get something in return.

Related: Our guide to email marketing automation for ecommerce.

Selling to your current customers is a lot easier and cheaper than converting a first-time customer. In fact, a study by Harvard Business Review found that acquiring new customers is about five to 25 times more expensive, than selling to the ones you already have.

Of course, old customers are more likely to buy your product because they have experiences with your product or service. If they like what they purchased, there’s a good chance they’ll buy from your store again.

In contrast, first-time customers are a lot harder to convince. You need to get them through the marketing funnel and send ads, emails and other marketing content to convince them to buy from your store.

That said—how do you increase repeat purchases in your retail store?

A popular trick is to send next purchase discount codes. Offer a small limited-time discount if they make another purchase.

Here’s an example from Etsy:

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They offered $2.00 off a customers next purchase and placed a link to their order details at the bottom. It’s nothing spectacular, but it’s a small incentive that can get customers to make  another purchase.

The strategies in this post are an easy way to generate additional sales and revenue with some minor tweak. While Shopify doesn’t allow you to directly customize their transactional emails, you can start with an email template and then use a tool like Spently.

Use their drag and drop functionality to add product recommendations, unique discounts and referral codes to your transactional emails.

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Special thanks to our friends at Gorgias for their insights on this topic.
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